While talking about healthcare reform with my wife, our teenage son started asking questions. We tried to answer him in a way he could understand, but we just weren’t getting through. Health insurance is a foreign language to him. However he is dreaming about which car he will soon purchase. So we introduced ObamaCare to him by way of the Affordable Car Act… a.k.a. Obama-Car:

Yes, these OPTIONS are nice if you have the money to pay for them, but they should remain OPTIONS, not REQUIREMENTS.

Instead of a Chevy Cruze starting at $17,000 the new Obama-Car compliant version (such as the Chevy Volt) would be priced around $34,000.

Obama claims these new cars will only be paid in full by the “millionaires and billionaires” because anyone making less than 400% of the poverty level will have some (or all) of their car subsidized by the government.

Now let’s talk about used cars…

Let’s say you like your existing car. As long as you owned it before March 23, 2010, you would be allowed to keep it. You cannot make any changes to it or it would no longer be “grandfathered” and you would be forced into buying a new Obama-Car next year or pay a penalty.

If it doesn’t get good enough gas mileage or include all the new Obama-Car required Overpriced Bureaucratically Authorized Mandated Add-ons (OBAMA), then you would also be penalized.

Our son is glad Obama-Car doesn’t exist. He can save his own money to purchase any car he chooses… as long as Dad (not Obama) approves of it!

Dislaimer: This article was never meant to suggest Obama-Car legislation is needed or should ever become law.

(Updated 2013 post-election)
The Patient Protection and Affordable Care Act (PPACA, ObamaCare) has been ruled constitutional. And Obama has been re-elected so there is no chance of repeal. What does all this mean for Health Savings Accounts?

HSA qualified High Deductible Health Plans (HDHP) are the fastest growing segment in health insurance today. Over 15 million people have over $17 billion saved in their HSAs. Since unspent HSA funds roll over from year to year, HSA owners have a vested interest in not spending their own healthcare dollars. The more common co-pay plans insulate people from costs which often results in over-utilization. HSAs change this behavior. This is why they are commonly referred as ‘Consumer Driven Healthcare’ plans.

There are some portions of the law that directly affect HSAs. There are several other rules that we have to speculate how they will be implemented. Let’s begin with the direct HSA rulings:

1. The penalty for ineligible withdrawals from an HSA has been increased from 10% to 20%
2. All over-the-counter medications now require a written prescription

That’s it. As long as you keep proper records verifying your HSA withdrawals were for eligible medical expenses (see publication 502) and obtain a written prescription for your allergy medication, pain relievers, etc. then you will not be subject to any penalty at all.

Now for the provisions that will impact HSAs indirectly:

1. INDIVIDUAL MANDATE (2014)
Since ObamaCare requires people to purchase health insurance, most people who are currently uninsured will look for the lowest cost option available. HSA qualified insurance policies are not allowed to have co-pays and have minimum deductibles of $1250 for self-only coverage and $2500 for families which makes them more affordable. This could dramatically increase how many HSA qualified plans are purchased.

2. STATE EXCHANGES (2014)
Exchanges are online portals where people can enroll in health insurance plans and potentially receive government subsidies based on income (up to 400% poverty level). Since HHS Secretary Kathleen Sebelius continues to interpret how these exchanges are to be implemented, this one is far from finalized. Companies will be allowed to offer up to 4 plans on the exchanges (bronze, silver, gold, platinum) each with mandated “Essential Health Benefits”. All exchange qualified small group plans have a maximum deductible of $2,000 for self-only coverage and $4,000 for families. This type of a restriction will increase the cost of HSA qualified health insurance plans over the larger deductibles available today (up to $6,050 for self-only coverage and up to $12,100 for families). But they should still offer a substantial premium savings over co-pay plans.

3. MEDICAL LOSS RATIO (2011)
ObamaCare requires Health insurance companies to pay at least 80% of all collected individual / small group premiums and at least 85% of all large group premiums out in benefits and claims. HSA qualified insurance plans typically cost less while still having similar fixed costs (insurance company marketing, underwriting, and claims processing) which makes MLR a difficult provision for them to comply with. This could limit the number of insurance companies that offer HSA qualified plans on the exchanges. However the elimination of underwriting costs (all plans will be guaranteed issue) and the reduction in marketing costs for the insurance companies once most insurance agents are replaced by exchanges should make all plans MLR friendly by 2014.

Unfortunately Massachusetts passed healthcare reform back in 2006 that is eerily similar to Obamacare 2010. The huge premium increases necessary to cover these madate laden policies is causing a new set of problems in Massachusetts.

It looks like many Massachusetts municipalities are paying extremely high health insurance premiums. Some of these “Cadillac” plans cost over $40,000 per year! Everything over $27,500 is going to be subject to additional taxes which will result in…. EVEN HIGHER PREMIUMS!

Here is a link to three Cadillac models you can purchase for under $40,000. At least you can take a few years to pay off a Caddy…

Buy a brand new Cadillac for less than some people pay for health insurance every year!

Since government regulations such as guaranteed issue have made health insurance so affordable in Massachusetts, why don’t we have Washington pass similar legislation for our whole country?

The first casualties of Obamacare seem to be businesses with retirees that used to be able to take a tax deduction for covering their retiree prescription drug programs. AT&T was one of the first to share their concerns.

AT&T estimates Obamacare will cost them (and us) $1billion

But you might not want to start complaining about how much Obamacare is going to cost your company. Otherwise you will probably be summoned to Washington to explain how come eliminating business tax deductions will costs you money. These are the same bureaucrats that think 2400+ pages of regulations and subsidies will somehow save our economy, so facts and common sense won’t help.

Democrats accused of intimidating firms for healthcare concerns

The tax increases on the surface of Obamacare are targeted at wealthy people, but the additional costs will all be passed on down the line to the consumer. So it’s not only “the rich” that will have to pay more for everyday goods & services to cover the mandated benefits and additional taxes contained in Obamacare… WE ALL WILL PAY!

If / When this administration offers enough bribe dollars to pass healthcare reform, although the “benefits” don’t start for 4 years… get ready to start paying for it immediately. There are over 19 tax increases identified (so far) in the 2409 page bill being voted on tomorrow.

Welcome to the Biggest Tax Increase in U.S. History - Business Insider

Although there will be additional hurdles to overcome before this monstrosity becomes law, I am fairly certain it will pass. Wave cash in front of a politician and they’ll quickly forget who they are really working for. I just hope Americans will make them pay this fall.

They’re trying to pass a healthcare plan written by a committee whose chairman says he doesn’t understand it, passed by a Congress that hasn’t read it but exempts themselves from it, to be signed by a president that also hasn’t read it with funding administered by a treasury chief who didn’t pay his taxes, and financed by a country that’s broke. What could possibly go wrong?

The Galen Institute has put together a “Do no harm” (http://www.donoharmpetition.org/) petition calling on Congress to follow the Hippocrates oath to “First, do no harm” when it tries to heal health care.

What Is An HSA?

A Health Savings Account (HSA) is a tax-deductible account to which you can contribute to save for future medical expenses or to pay for any day-to-day, qualified medical expenses permitted under federal tax law...[More]

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